Emerald | Accounting, Auditing & Accountability Journal | Table of Contents

Problematising Accounting for Biodiversity

literatinetwork@emeraldinsight.com (Michael John Jones, Jill Frances Solomon) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - This paper problematises ‘Accounting for Biodiversity’ and provides a framework for analysing and understanding the role of accounting in preserving and enhancing biodiversity on Planet Earth. The paper aims to raise awareness of the urgent need to address biodiversity loss and extinction and the need for corporations to discharge accountability for their part in the current biodiversity crisis by accounting for their biodiversity-related strategies and policies. Such accounting is, we believe, emancipatory and leads to engendering change in corporate behaviour and attitudes.Design/methodology/approach - We reviewed the literature relating to biodiversity across a wide array of disciplines including anthropology, biodiversity, ecology, finance, philosophy, and of course, accounting, in order to build an image of the current state of biodiversity and the role which accounting can and ‘should’ play in the future of biodiversity.Findings - This paper finds that the problems underlying accounting for biodiversity fall into four broad categories: philosophical and scientific problems, accountability problems, technical accounting problems, and problems of accounting practice. Through establishing a framework problematising biodiversity, we lay out a roadmap for researchers and practitioners to navigate a route for future research and policymaking in biodiversity accounting. The paper concludes that an interdisciplinary approach to accounting for biodiversity is crucial to ensuring effective action on biodiversity and for accounting for biodiversity to achieve its emancipatory potential.Originality/value - Although there is a wealth of sustainability reporting research, there is hardly any work exploring the role of accounting in preserving and enhancing biodiversity. There is no research exploring the current state of accounting for biodiversity. This paper summarises the current state of biodiversity using an interdisciplinary approach and introduces a series of papers devoted to the role of accounting in biodiversity accepted for this AAAJ Special Issue. The paper also provides a framework identifying the diverse problems associated with accounting for biodiversity.

Bringing tropical forest biodiversity conservation into financial accounting calculation

literatinetwork@emeraldinsight.com (Thomas Cuckston) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - This paper seeks to examine how the biodiversity comprising a tropical forest ecosystem is being protected as a result of having its conservation brought into financial accounting calculations by constructing a greenhouse gas emissions offset product to sell on the voluntary over-the-counter carbon markets.Design/methodology/approach - The research examines a single embedded case study of a biodiversity conservation project in Kenya. The resulting discussion builds upon the existing accounting and organisation studies literature regarding the construction of markets.Findings - Whilst the case examined does successfully bring tropical forest biodiversity conservation into the financial accounting calculations of the sellers and buyers of the offset product, via processes of objectification and singularisation, there are considerable accounting obstacles to constructing a calculative mechanism capable of achieving this on a global scale to facilitate financing of the conservation of all the world’s remaining tropical forest biodiversity.Originality/value - The paper contributes to the debate on accounting for biodiversity by examining market construction as a theoretical framework for turning the loss/conservation of biodiversity from an externality into an entity that is taken into account in organisations’ calculations of profit and loss.

Biodiversity valuation and the discount rate problem

literatinetwork@emeraldinsight.com (Mark C Freeman, Ben Groom) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - To demonstrate that the application of standard environmental accounting practices for estimating long-term discount rates is likely to lead to the rejection of biodiversity-sensitive projects that are in the greater societal good. Design/methodology/approach - We combine estimates of marginal ecosystem damages from two forestry case studies, one local, one global, with ten different term structures of discount rates taken from both the academic literature and policy choices to calculate present values. Findings - Standard environmental accounting approaches for estimating the long-term discount rate result in the under-valuation of projects that are sensitive to biodiversity conservation. Research limitations/implications - This paper is set within a Full Cost Accounting (FCA) framework, and therefore has the limitations that generally follow from taking this approach to biodiversity problems. Recommended extensions include looking at broader ranges of biodiversity costs and benefits. Originality/value - (i) To introduce both normative discount rates and declining discount rates to estimates of shadow environmental provisions within FCA and to contrast these with current environmental accounting practices, (ii) To provide two detailed case studies that demonstrate the extent to which biodiversity-sensitive investment choices are likely to be undervalued by managers who follow current accounting recommendations concerning the appropriate choice of discount rate.

Biodiversity reporting in Sweden: Corporate disclosure and preparers’ views

literatinetwork@emeraldinsight.com (Gunnar Rimmel, Kristina Jonäll) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - The purpose of this article is to provide an account of the quantity, location and intentions behind companies’ biodiversity disclosure.Design/methodology/approach - This study applies a mixed methods approach to the examination of the quantity and location of biodiversity disclosure. The research focuses on a study of corporate websites and corporate reports over a five-year period. Interviews with company representatives were also conducted regarding company intentions behind biodiversity disclosure. Findings - The findings of this study show that few of the companies studied have a record of providing continuous biodiversity information. Those companies that provide the most biodiversity information are in the lower-risk sector. The interview respondents identify social environmental reporting frameworks as catalysts for biodiversity disclosure. A reason for this low level of biodiversity disclosure may be the infrequency of interaction with pressure groups. However, the respondents also state, as increasingly their companies have paid more attention paid to sustainability reporting in recent years, more detailed biodiversity disclosure has resulted.Research limitations/implications - The research in this study, which is explorative and descriptive, is limited to a study of the quantity and location of biodiversity disclosure by 29 companies listed on the OMXS30 and the preparers’ reasons for such disclosure.Originality/value - This is an original study that attempts to go beyond mere reporting of biodiversity disclosure by examining the motivations for such disclosure using interviews with company representatives.

MAINSTREAMING BIODIVERSITY ACCOUNTING: POTENTIAL IMPLICATIONS FOR A DEVELOPING ECONOMY

literatinetwork@emeraldinsight.com (Javed Siddiqui) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - The paper seeks to respond to calls by Jones (British Accounting Review, 1996) for more studies exploring the possibility of operationalising accounting for biodiversity. Design/methodology/approach - Archival data is used to produce a natural inventory report for the Sundarbans, the world’s largest Mangrove forest, declared as a World Heritage site by the UNESCO in 2007.Findings - The study extends prior research on biodiversity accounting by exploring the applicability of Jones’ natural inventory model in the context of Bangladesh. The results indicate that application of Jones’ natural inventory model is feasible in the context of developing countries such as Bangladesh. It is also recognised that the socio-economic and political environment prevailing in developing economies may lead to the emergence of important stakeholder groups including local civil society bodies, international donor agencies and foreign governments. Biodiversity accounting may provide a legitimate basis for the government in allaying concerns regarding environmental stewardship and assist in negotiations with powerful stakeholder groups on important issues such as financial assistance after natural disasters and claims to the global climate change fund.Originality/value - This is one of the early attempts of operationalising biodiversity accounting in the context of a developing economy.

Biodiversity offsetting: Problematisation of an emerging governance regime

literatinetwork@emeraldinsight.com (Helen Tregidga) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - The paper analyses accounting rationalities and practices which lie behind biodiversity offsetting. The way in which accounting functions as a technology of government through the practice of biodiversity offsetting is considered and its effects examined. Design/methodology/approach - Governmentality is drawn upon to examine ways in which power and authority are exercised in a single case study setting. Data analysed comprises of corporate and industry websites and documents, corporate reports, public documentation and interviews. The arena concept is utilised to highlight contestation in the case, and signal concerns regarding the wider impact of the use of particular accounting rationalities and technologies in the context of biodiversity offsetting. Findings - The paper provides empirical insights into how accounting for biodiversity offsetting rationales and practices constitute an attempt to reproduce power relations in favour of particular parties and foster disciplinary effects. The practice of biodiversity offsetting is problematised through critiquing accounting’s governing role in the areas of biodiversity quantification and biodiversity trading. Questions are raised as to whether biodiversity offsetting enabled by accounting techniques is leading to greater accountability and ultimately protection of biodiversity, or whether it represents a mechanism through which particular species and habitat destruction can be justified, or at least hidden in its accounting. Originality/value - While biodiversity offsetting research is not uncommon within science and law, the analysis of how accounting functions as a technology of government within biodiversity offsetting is believed to be unique.

Biodiversity Reporting in Denmark

literatinetwork@emeraldinsight.com (Dennis van Liempd, Jacob Busch) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - This paper aims to suggest that companies have ethical reasons to report about biodiversity and investigates whether companies act on these reasons by examining the extent of biodiversity reporting in Denmark. Design/methodology/approach - For the first purpose, desk research was conducted using consequentialist ethics, while for the second purpose, data were gathered from the 2009-2011 annual reports, CSR-type reports and homepages of 24 Danish large-cap companies.Findings - Philosophically, it is shown that biodiversity preservation and reporting is an ethical issue, even on the assumption that biodiversity does not possess intrinsic value. Empirically, it is shown that Danish companies score poorly overall, both quantitatively and qualitatively, with regards to reporting on biodiversity. Research limitations/implications - Even though the importance of biodiversity can be justified on different assumptions, biodiversity reporting is under-researched offering potential for future research on a globally important issue. Practical implications - Justifying the preservation of biodiversity from an instrumental viewpoint might convince accounting audiences that are sceptical of normative ethical argumentation based on intrinsic value. The relative lack of biodiversity reporting in Denmark shows the need for the State and accounting standard setters to address this issue together with business and other stakeholders. Originality/value - Few studies theorize on why we need environmental reporting. Those that do are based on non-instrumental considerations. This paper gives philosophical arguments for biodiversity reporting normally outside the scope of accounting. We are emphasizing how even those who deny that biodiversity has intrinsic value are morally obliged to account for biodiversity. Our argumentation also provides novel reasons for why we should not let our thinking about discount rates be governed by pure preference considerations. Empirically, this is only the second paper examining biodiversity reporting and the first about the Danish context.